☆ Touted World Financial Recovery From 2008 Has Legs Of Straw

News Analysis:  Nations’ Central Banks, led by the U.S. Federal Reserve and its  Chairman, who is departing shortly, used up his “Ammunition” against Deflation by keeping Interest Rates near Zero . Now what can he or his Replacement Minion do to lessen rates even further, if needed?

After five and one-half years, where is the “Great Recovery” his Cohorts in the U.S. White House promised voters. The “Shuck and Jive” that the Media have been passing on to the Public originated in the White House.

The touted Stock Market Recovery has been a “Bubble” with no substance to support it. Where are the heavy earnings to support the high Stock Prices? Where is the Abundant Manufacturing and Exports of Goods needed?

Now, Investors around the World appear to be understanding that a “Bubble-Master Created Bubble” may soon burst; as did the Real Estate Market and the Precious Metals Market.

Those who hold Bonds can expect elevated Interest Rates to destroy Market Values of the Low Interest Yielding Bonds fashionable during the “Bearded” Federal Reserve Leader’s questionable Reign.

Those “Masters of the Universe” in Banking, Commerce, and Finance who did not see the Debacle of 2008 looming in their immediate future (at that time) apparently again suffer from Myopia in not seeing the pending World-Wide Slump awaiting them shortly.

As for the U.S. White House and its lackeys, if things collapse, and they get dis-spirited, they can always fly to Las Vegas, Nevada and be entertained by their friends (as they did when Benghazi, Libya was on fire a couple of years ago).

Reality.

Reference: http://www.thejakartaglobe.com/business/asian-shares-dive-as-fed-cut-sparks-emerging-market-fears/

★ 2014 Equity Investments: “Stay Long” Is A Fool’s Song

News Analysis:  As to 2014 Equity Investments, it becomes a Year of less capability of Central Banks to play “Interest Rate Lowering Games” (IRLG)  to Support their Economies. With ‘IRLG’ already, in 2013, at historic lows  in most countries, do Central Banks “lower rates into negative ranges”? Effectively: Do these Banks pay Borrowers for the Borrowing of monies from the Banks?

Since MANY Banks throughout the World already have questionable loans made to customers, if the borrowers start defaulting, en-masse, what happens to the Banks? What happens to Equity Markets? Can ALL Banks even pass ‘Stress Tests’?

Central Banks can be ordered to print more Money (mere paper with ink on it); Supported by Next To Nothing. For example, if a “Super Power”, which already has $17+ Trillion Dollars in Debt, wants ‘Monetary Expansion’, it works its ‘Bureau of Printing and Engraving’ Presses 24 hours a Day, Seven Days a week and ‘Voila” More Money! No problem! Inflationary Effects of such behavior can be curtailed in the Short Term only. The effect on the populations’ thoughts are “Things are not bad. People have money”. They spend the money and a ‘Multiplier Effect” takes place creating activities financially.

However, since the money is based not on increases in Gross Domestic Product of the Country, but on Printing Capacity, a ‘Mirage” of Good Economic Health exists (Until the ‘Patient” coughs)

Covering the Costs of War, Natural Calamities (such as America’s “Hurricane Sandy” hitting New York City, Tornadoes, or Tsunamis (like the Fukushima, Japan Incident) can  be the “Cough” the Central Banks can ill-afford. The Delayed Repairs thereafter (as in Hurricane Sandy) evidence the Government’s actual lack of financial resources (to which it is loathe to admit). Additionally, borrowing more money by Central banks increases Debt Service Expenses.

One must ask, how can the Stock Markets be at “Highs” with Weak Economies and Poor Prospects for Growth in 2014? What major Manufacturing Programs are currently occurring? Where are “High-Dollar” Service Contracts being let? Are there large  areas of the Economy paying “Good Wages”?  Is National Employment at high levels?

“Markets look SIX MONTHS Ahead” is the Stockbroker’s Mantra. Current Market Prices Of Stocks are NOT supported by Economic Realities, many people think; Not of 2013, nor 2014.

In Not “Actually Solving the Economic Problems”, as aforementioned, the governments turn to their Civilian Banks who utilize the services of the “Bubble Masters”. These are the platoon of Economic Marketeers, including the Mass Media, who start ‘blowing their “Bugles” for a ‘Charge’ into a particular Industry they have already prepared. The Bankers, Brokers, and their  ‘Buddies’ win, other lose; and so it goes. One should realize: The present  “Stock Bubble” will collapse (as did the “Gold Bubble” before it and the “Real Estate Bubble” preceding the Gold Bubble)!

“Listening to Brokers will make one ‘Broker'”, many cautious people say. Brokers opine that “2014 will be a Year of Cautious Investing” while they and their friends ‘Short the market’ (to get every ‘Last Dime’ from the “Freiers”).

 A Wise Investor may think: “Do I want to risk my current gains by seeking every  last Penney or do I cash out now and Plan for Tomorrow; with my Gains of Today?” 

When Brokers say “Stay Long” (with mediocre realities), Smart Thinkers ask “Why?”.

As the Wise Investor considers to hold or sell his or her Equities, Bankers, Brokers, and their Buddies consider which new “Market Bubble” they will create; for them to Win, others to Lose.

Very Smart Investors consult Others who can correctly ‘Connect the Dots’ for determination of ‘Incipient Economic Bubbles’ so they also can Win in these ‘Carnival Games’.

Reality.

Reference: http://news.xinhuanet.com/english/world/2013-12/28/c_133003842.htm

★ China’s Yuan Does NOT Make People Yawn

Premium News Analysis:  China’s Yuan Does NOT Make People Yawn since it Excites Them by providing an Additional Trading Choice, for One Reason.  The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has its Second Most Utilized Currency as the Yuan. Since the Yuan has beaten out the Euro for its current position, it bodes very well for an even Greater Market Share.

People want to deal with “Winners”.

A Second Reason for the Yuan’s Growing Popularity is that the Issuing Country does not have $17 Trillion+ in Debt as does the Leading Currency Country. The Dollar, some would suggest, can only be de-based by Continued printing of Prodigious Amounts of Currency; with “Little to back it up” Now or in the Future. It’s Manufacturing Base has declined over recent years due, in part, to effects of Treaties signed. Manufacturing/Technology has moved overseas . It now has “Less demand for Goods To Sell in the World. Fewer sales produce less Federal Taxable Revenue for balancing the budget. Why join that “Card Game”?

Rationale behind a Third Argument for the Yuan is that it Trades readily in the Purchase and/or Sale of Goods and/or Services  to/from  the Business Behemoth, China. Dealing in the Yuan as the Mutually Agreed upon Currency in a transaction can mean even larger purchases and sales as a result. Blocks of Yuan Currency in Central Banks (which more Countries are depositing), in the Trading Countries of businesses,  help facilitate this process.

A Psychological Reason, fourth, for the Yuan’s growth may be the Increased Popularity of China’s “Dollar Diplomacy”. The “Bayonet Diplomacy” used by some World Powers is Abhorred by People of the World. Why Trade using a “Bully’s” Currency or the businesses in that Country; Especially when it Spies on ALL Electronic (Currency) Transactions in the World? Perhaps, Countries want to give the “Bully” something, not of its own, to look at: The Yuan. Reality.

Reference: http://www.bloomberg.com/news/2013-12-03/yuan-passes-euro-to-be-second-most-used-trade-finance-currency.html